nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2007‒01‒02
four papers chosen by
Karl Petrick
University of the West Indies

  1. Monetary and budgetary-fiscal policy interactions in a Keynesian heterogeneous monetary union By Angel Asensio
  2. Moral fictionalism, preference moralization and anti-conservatism: why metaethical error theory doesn’t imply policy quietism By D.Ross
  3. Social Choice and Just Institutions:<br />New Perspectives By Marc Fleurbaey
  4. A Conceptual Framework for Interpreting Recorded Human History By Douglass C North; John Joseph Wallis; Barry R. Weingast

  1. By: Angel Asensio
    Abstract: The paper studies the effects of heterogeneity upon the monetary and fiscal-budgetary policy interactions in a Keynesian monetary union. As a result of interactions, some of our results contrast sharply with the ones in studies that consider separately monetary, fiscal and budgetary policies. Other non-conventional mechanisms are identified in connection with the supply-side effects of fiscal taxes variations. As concerns policy responses to inherited unemployment, the central bank profile proves notably to be crucial in determining the magnitude of the instrument moves that are required to achieve the objectives. Simulations suggest that heterogeneity is likely to introduce more sources of non conventional effects and to enforce adverse interactions, especially in contexts of high unemployment. However, provided authorities are able to control the distributive conflict and its inflationary consequences, it is beneficial for the union that monetary policy specializes in countering the common effects of shocks, because that pushes governments to concentrate in countering the idiosyncratic effects. Employment targets require then lower instruments responses, as a result of efficiency gains.
    Keywords: Monetary policy;Fiscal policy;Monetary union;Macroeconomic governance;Post-Keynesian
    Date: 2006–12–14
  2. By: D.Ross
    Abstract: The evolutionary explanation of human dispositions to prosocial behaviour and to moralization of such behaviour undermines the moral realist's belief in objective moral facts that hold independently of people's contingent desires. At the same time, advocacy of preferences for significant departures from hallowed policies (that is, for 'loud policies') is generally sure to be ineffective unless it is moralized. It may seem that this requires the economist who would advocate loud policies, but is also committed to a naturalistic account of human social and cognitive behaviour, to engage in wilful manipulation, morally hectoring people even when she knows that her doing so ought rationally to carry no persuasive force. Furthermore, it might be wondered on what basis just for herself an error theorist about morality advocates loud policies. I argue that understanding the role of moralized preferences in the maintenance of the self, and in turn understanding the economic rationale of such self-maintenance, allows us to see how and why preferences can be moralized by a believer in error theory without this implying hypocrisy or manipulation of others. Length 30 pages
    Date: 2006–12
  3. By: Marc Fleurbaey
    Abstract: It has become accepted that social choice is impossible in absence of interpersonal comparisons of well-being. This view is challenged here. Arrow obtained an impossibility theorem only by making unreasonable demands on social choice functions. With reasonable requirements, one can get very attractive possibilities and derive social preferences on the basis of non-comparable individual preferences. This new approach makes it possible to design optimal second-best institutions inspired by principles of fairness, while traditionally the analysis of optimal second-best institutions was thought to require interpersonal comparisons of well-being. In particular, this approach turns out to be especially suitable for the application of recent philosophical theories of justice formulated in terms of fairness, such as equality of resources.
    Keywords: social choice, theories of justice
    Date: 2006–12–20
  4. By: Douglass C North; John Joseph Wallis; Barry R. Weingast
    Abstract: Neither economics nor political science can explain the process of modern social development. The fact that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process. This paper develops an integrated theory of economics and politics. We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.
    JEL: A0 K0 K22 N0 N4 N40 O1 O4 P0 P1 P16 P2
    Date: 2006–12

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